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AFG
AFG
AFG - Afgem Limited - Restructuring, Intended Future Strategy
And Further Cautionary
Afgem Limited(Incorporated in the Republic of South Africa)(Registration
number 1998/007292/06)JSE code: AFG & ISIN: ZAE000067757("Afgem" or "the
Company")
RESTRUCTURING, INTENDED FUTURE STRATEGY AND FURTHER CAUTIONARY
Shareholders are referred to the cautionary announcements dated 16 November
2006, 12 December 2006 and 24 January 2007.
National Union of Mineworkers ("NUM")
Shareholders are advised that negotiations are continuing on a regular
basis as to the settlement of the long standing dispute with the NUM.
Recovery of monies owed by Rex Mining Corporation Limited ("Rex Mining")
Management is actively pursuing the recovery of the monies owed by Rex
Mining through the Courts. A judgement has been obtained for R1.5 million
plus interest from November 2005 against Rex Mining for this overdue
payment, but this judgement has been appealed by Rex Mining and the appeal
has not been heard as yet. Afgem has security for this debt. Further legal
steps have been taken against Rex Mining for the recovery of an additional
R6.2 million owed to Afgem. The non-payment of these debts owing to Afgem
has resulted in short term cash flow constraints in the Company.
Restructuring
Shareholders are aware that both the Bokang and the Simolotse Mines are
currently under care and maintenance. Management is actively seeking
purchasers for these assets and is currently engaged in discussions with
various parties in respect of the disposal of the mines. The NUM has been
kept fully appraised of developments with potential purchasers and is
sympathetic to the Company`s financial situation. Simultaneously,
consideration is being given to, and discussions are being held in relation
to, the identification and acquisition of a suitable business that will
ensure the ongoing sustainability of the Company and shareholders will be
kept informed of these developments as soon as firm agreements are in
place.
Suspension in the trading of the shares of the Company
During the course of Wednesday, 7 March 2007, the Company became aware that
information about the difficulties the Company was experiencing in respect
of cash constraints had become known to persons beyond the confines of the
Company`s management. Consequently, the Board requested the JSE Limited to
suspend trade in the Company`s shares with immediate effect.
Once clarity and certainty has been obtained with regard to the resolution
of the issues set out above, a detailed announcement to shareholders will
be published and the appropriate shareholder and regulatory approvals will
be sought. In the interim, the shares of the Company will remain suspended
from trade.
Further cautionary announcement
Shareholders are advised to continue exercising caution when dealing in the
Company`s securities, until a further announcement is made.
Melrose Arch
8 March 2007
Sponsor: ABSA Capital
Date: 08/03/2007 11:24:15 Produced by the JSE SENS Department.
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